Lesson 3 Know Your Enemy (Understanding the Fitness Industry, Part 1)

In this lesson, you are going to learn how to save money by taking advantage of the way the clubs work and the way the sales people operate. By knowing their strategies, you can mount a counter attack behind enemy lines that is sure to keep cash in your pockets and out of enemy hands.

You’re so fat; you can’t afford NOT to buy this membership today. After all, how much is your health worth?

Don’t you respect yourself? Are you now ready to stop procrastinating? When is now a good time to start making the physical changes you deserve?

Hey, we do have this one-time only special. You save over one hundred dollars by joining today only.

You can only get this deal on your first visit to the club.

Don’t worry, that’s just the required processing fee.

Thor the power lifter is the perfect trainer for you. He doesn’t take steroids anymore. The restraining order has been lifted.

What? The class-action lawsuits? No, our club isn’t like all the other clubs, if you need to cancel you can... (Mumble, grumble).

Yeah, you have three days to get a refund, but how can you get in shape in three days? Besides, look at all the classes you get for free!

I know you are going to love that underwater basket weaving class. You know you will love it here! So let’s get you started. Sign here… Which credit card do you want to use right now?

In my years working in fitness clubs, I realized that the more things change, the more they stay the same. I once ran across a survey that questioned people about their perception of salesmen across a multitude of industries. The sales experiences that customers had were appalling. Tied for worst were used-car salesmen and health club salesmen in terms of overall customer perception. This study obviously was a result of years of fast money approaches and slash-and-burn sales techniques that were pervasive in the fitness business models of the 1980’s and 1990’s.

Although the years of class-action lawsuits for fraudulent lifetime memberships may be over, you can bet the lure of quick and easy money has made its mark on fitness businesses, and will continue in one form or another as the huge demand for this industry continues to expand.

In spite of the fact that the numbers are constantly changing, it is helpful to understand some of the financial snapshots. Health club membership in the United States increased by more than 3 percent from 41.3 million members (over the age of six) in 2005 to 42.7 million in 2006, while the total number of Americans who visited or belonged to a health club increased by more than 6 percent from 64.9 million people (over the age of six) in 2005 to 69.3 million in 2006. This is an indication that more people started to exercise and go to fitness clubs regularly.

This growth in health club membership represents an increase of more than 25 percent in just 5 years, while growth in health club patronage represents an increase of nearly 20 percent.

Here is what you need to understand about the industry as a whole:

Seasonal Cycles (And How to Take Advantage of Them)

The fitness industry follows seasonal trends. This means that the hottest time at any fitness club is going to be in January and February. Why? A couple of basic reasons: First, January is when people are just getting over the grotesque hangover of food comas, the overindulgence and gluttony of the holidays, a week or more of becoming a sloth, and of course, the dreaded New Year’s resolution. I have had many conversations with people that claim they don’t take part in those silly New Year’s resolutions, and yet my guess is that it is so ingrained in our culture that no one can completely escape it. It somehow is just natural to want to get a fresh start in a new year. Kids go back to school, and parents go back to work. Everyone craves a healthy routine and everyone wants to “get it right” this time. They are certain that this time will finally be the time that they lose weight, shed unwanted body fat, and become a toned and energetic super-performer. The trouble for them is that they never do, much to the thrill of the fitness tycoons, whose wallets get fat from this simple phenomenon.

This wave will have its biggest push the first few weeks of January. There is often a slight plateau, and then a second smaller wave in February. Depending on your demographic and particular club geography and social atmosphere, the second wave may actually be bigger than the first.

The Sad Truth (of Human Nature and Membership Usage)

This initial buzz around the club will begin to die by mid to late February, and two-thirds of the initial visitors will fade away by mid March. Does this mean that the club owner begins to panic? Not necessarily. In fact, the fitness industry thrives on this! When Joe Schmoe signs up January 2nd with his live-in girlfriend, and pays his entire paycheck to Super Gym Conglomerate, Inc., he has already played right into their preferred business model. Mr. Schmoe and his live-in girlfriend then proceed to not go to the club, and in not doing so, he doesn’t do the following:

He doesn’t track dirt in on the carpet.

He doesn’t create wear and tear on the equipment.

He doesn’t sweat on the equipment.

He doesn’t take up the front desk workers’ processing time.

He doesn’t use up hot water in the shower.

He doesn’t dirty the pool.

He doesn’t complain about broken or dirty equipment.

He doesn’t move things around and not put them back where he found them.

He doesn’t ask for the manager or owner, who would have to increase his hours to meet this need.

And most importantly: He doesn’t hold up the sales staff from signing up other Schmoes and Schmucks.

I can hear you saying: “Why on earth would Joe Schmoe pay all that money if he never intended on being there?!” I am sure that Mr. Schmoe had great New Year’s resolution intentions. In fact, I am sure that in September of the following year, Mr. Schmoe is still telling himself that one of these days he will get back in and use his membership. After all, he did spend all that money, and he does want to get into shape. I am sure Mr. Schmoe will get around to using it. If he didn’t he would have to cancel, and that would be pretty embarrassing. I mean he would have to admit that he wasted all that money on something he never or hardly ever used. That would create a lot of guilt, wouldn’t it? Maybe he can just keep paying a little longer to get past the next big project at work, and when the kids go back to school he can then find the time after fixing up the house to start a workout program, and then he can use it almost every day and that will more than make up for the lost time and money, right?

…Yeah, right.

In fact, the second seasonal boom for fitness is after Labor Day when the kids go back to school and the routine bug hits again. They were having barbeques all summer and going on vacation and eating like pigs on their cruises. Now that the kids are back and they are back to work, well, they can finally get back to that healthy routine and end procrastination forever!

All this time the fitness club keeps clean, unused and well paid for, fulfilling the dream of the easy-money entrepreneur. Of course, many clubs aren’t this lucky, as their overhead was too ridiculously high to begin with, and they can’t come close to making any money for the first three years, but nevertheless, this is a consumer trap that the average Schmoe gets himself into.

Is this ringing a bell or pouring salt in a wound for you? If so, read on and you may change your habits from this realization.

What does this all mean? It means that the last time that you want to go to the club for your well-planned scream-of-a-deal fitness membership is January or September. You don’t want to be there when demand and prices are high. Perhaps the single best way to get a frighteningly awesome deal is to simply time it right. If you do nothing else that this book suggests, walk into the club at the right time.